Note: This includes two posts originally published on back-to-back days.

Part 1: How to turn one terrible scandal into two

Imagethief loves watching companies hang themselves. Unless they are his clients, in which case he has fits watching them hang themselves because it means sleepless nights in the glow of the computer eating greasy dinners out of Styrofoam boxes.

Fortunately for me, China Railway 12th Bureau Group Company is not one of my clients. For one thing, if they were, I’d advise them to change their name. I had to look at the original article twice to transcribe it. I’m sorry, but if you’re not a law firm you have no business having five nouns in your company name.

More importantly, they have just committed one of the great PR sins: the busted coverup. From AP, via BusinessWeek:

Police have detained 10 people in charge of building a new subway line for the 2008 Beijing Olympics after one of the project’s tunnels collapsed, trapping six workers, state media said Friday.

***

Construction company China Railway 12th Bureau Group Co., was suspected of trying to cover up the accident and delaying rescue efforts that might have saved lives, Xinhua said.

Police have detained 10 people including the project supervisor and the tunnel’s designers, Xinhua said. It did not give their names or say if they had been formally charged with any crime.

Xinhua said the construction company sealed the site immediately after the accident, confiscated employees’ mobile phones and ordered people not to talk to police or media.

The company did not report the accident to city authorities until eight hours after it occurred, it said, citing unidentified Beijing officials.

You would think that after the great Songhua River disaster of ’05 people would have learned their lessons about this. But it’s hard to overcome those olde fashioned instincts, and probably even harder when you are working on a marquee project that is part of Beijing’s pre-Olympic rectification program.

By definition, no one really knows how many successful coverups there are. However, I’d bet there really aren’t many. It all comes down to the old adage that two people can keep a secret if one them gets a lead tattoo. I am not sure any peer-reviewed scholarly work has been done in this area, but I am convinced that as the number of people involved in a coverup goes up, the risk of it being blown increases far more than in linear fashion. I betting that risk increases as at least the square of the number of people involved.

So you can confiscate all the mobile phones you want, and you can order people not to talk, but sooner or later somebody will. And probably sooner. And even if they don’t, people –family members and friends for instance– tend to notice a lot of sudden deaths.

Now China Railway 12th Bureau Group Co. (or CR12BGC as I like to think of it) has two crises on its hands: the possibly negligent deaths of twelve workers, plus a mass arrest of its executives and supervisors. Instead of looking negligent, they now look negligent, sleazy and criminal. Congratulations! It’s not easy to self-destruct that dramatically without being discovered trafficking in kiddie pr*n. Good luck explaining all this to the press.

Unless the government bans all coverage of the situation. This is China, after all, and the rules remain a little different. I realize also that CR12BGC is probably not the most progressive company when it comes to communication. But despite the high level of government intervention, China now has a scrappy, modern media that loves a good scandal. The sooner Chinese companies learn how to deal with this, the better things will go for them.

We PR people are widely unloved. There is some justification for this. As an industry we have a history of taking on unsavory clients and disagreeable jobs. But its also unfair in some ways. In crisis situations we spend a lot of time giving variations on the following straightforward advice to our clients:

Don’t lie.

Be mindful of your legal risk and prudent in communication, but don’t try to hide or distort the facts of what actually happened.

Don’t lie. (Again.)

Writ large or small, successful crisis communication is about clearly explaining your side of what happened and being publicly seen to take all practical steps to address the crisis and assist the people affected. You can’t bring back the dead, but you can take care of the living, understand what went wrong, visibly cooperate with authorities and demonstrate a commitment to learning from mistakes. It might not do anything about your legal liability, but it will help your reputation and generally costs less in the long run than the alternatives. And if you do get prosecuted, a constructive approach looks a lot better in court than an attempted cover up.

Plus its hard to work a crisis when all your spokespeople are in jail.

Gasp! It’s the China Railway 12th Bureau Group Co.!

Part 2: Beijing subway collapse: Whose crisis is it?

Following up on yesterday’s post about the Beijing subway collapse, I saw an interesting article (subscription) by Mei Fong in yesterday’s Wall Street Journal, Asia. (I try to get that right ever since one of their journalists explained to our staff in Beijing that it’s not the “Asian Wall Street Journal” any more, and that we had better get with the times.)

Because of its galvanizing effect on everyone with a China agenda, the Beijing Olympics has been described within my industry as “issues rich”. This is PR code for “shitstorm waiting to happen”, and is the kind of thing that usually leaves PR men cackling to themselves and planning expensive purchases. (Or, at my pay grade, grocery shopping.)

Among the many China issues that people get in a twist about is migrant laborers. There are by the government’s own estimates 115 million of them. For perspective, that’s less than 10% of the population of China, but more than 35% of the population of the United States. And I’m not sure the government is counting everyone.

A lot of these migrant workers are currently in Beijing, slaving away on extremely high-profile, deadline-sensitive projects that are part of the city’s pre-Olympic renovation. People have noticed this. Mei writes:

[Beijing’s] haste to meet its construction deadlines has resulted in round-the-clock work for the armies of often poorly paid, badly equipped migrant workers who build most of these projects. Some work shifts that can last as long as 24 hours.

The relatively poor working conditions of migrant workers has come under greater media scrutiny in recent months, causing international labor groups — many already critical of China’s poor human-rights record — to put greater pressure on the International Olympic Committee to improve the situation.

IOC spokeswoman Giselle Davies said in an email that “our understanding is that all efforts have been made both in terms of safety — specifically putting precaution first, and also in terms of transparent management.”

Does the IOC really believe that? Even if it doesn’t, is there anything else it could say without admitting culpability and precipitating its own crisis? How about:

“The IOC is aware of the widespread exploitation of Chinese migrant laborers, the mistreatment they commonly suffer and the appalling and unsafe conditions they endure. We sympathize completely. But we also believe that during the pomp of the opening ceremony, amidst the pageantry, grandeur and fireworks, no one will be thinking about a few bones in the foundations.”

Maybe not. OK, what Ms. Davies says isn’t as bad as my idiot scenario above. Note the weasel words, though: “Our understanding is…” That phrase is the IOC’s absolution. It transfers responsibility onto BOCOG and the Chinese government. They told us everything is OK. But for credibility it depends upon you and me believing that the chain of honest communication and transparency from labor contractors to construction subcontractors to primary contractors to the municipal government and BOCOG is intact. Do you really believe that? Of the Chinese construction industry? And if you don’t, then should the IOC?

I realize I am dissecting one partial statement out of context here. But that’s what the public will see, so that’s what will inform people’s opinions.

As for BOCOG, it has duelling priorities:

Priority 1) Have a glamorous and untarnished Olympic Games that mark China’s emergence on the International stage.

Priority 2) Get the goddamn thing done in time and on budget.

So which priority will win, and whose reputations will get trashed in the process?

493 days, 6 hours, 51 minutes and 17 seconds to go as of this posting.

About William Moss

Back in Silicon Valley after 17 years in China and Singapore. Stranger in a strange land. Director of Reputation Communications at Intel. This is a personal blog and opinions are my own. More information at "About Imagethief".